On April 22 the Glendale Police Department received a check for $575,513.91 from the Internal Revenue Service. The money came from Asset Seizure proceeds resulting from a 2004 investigation.
At that time, a Wells Fargo Bank representative contacted Glendale Det. Esperanza Fernandez, financial crimes division, asking for assistance in what appeared to be a crime involving fraud.
Fernandez began investigating and discovered both the IRS and FBI were also following similar fraud allegations. The detective joined with the other agencies and found Medi-Cal fraud, money laundering, tax fraud and bank fraud.
The elaborate scheme involved a couple, Mayya and Konstantin Grigoryan, purchasing a building and filling it with bogus businesses including medical laboratory and diagnostic services. There were several people that participated in the fraudulent businesses. Social security numbers were obtained and used in creating fraudulent claims against Medi-Cal.
“They would charge Medi-Cal for services like medical tests or purchasing wheelchairs,” said Sgt. Tom Lorenz.
The Grigoryans accomplice was Karlen Ghazarian. Together they would defraud Medi-Cal, get the illegal money and filter it through the various businesses they had established. This is how the illegal money was laundered.
“What is unusual is the couple purchased the building [in Glendale] and all the businesses were located there,” Lorenz said.
In similar schemes businesses would typically be scattered throughout Los Angeles County. As the investigation continued, those individuals who unknowingly had their social security numbers used for Medi-Cal reimbursement began going to legitimate doctors.
“They would find out that Medi-Cal had already paid for tests or wheelchairs that the patients never received,” Lorenz said.
Several of those involved were convicted with sentences ranging from two to eight years in federal custody.
“This is an example of how successful partnering with other agencies can be,” said Glendale Police Chief Ron DePompa.
The money given to Glendale was from the sale of the couple’s building. The funds cannot be used for personnel, according to the IRS parameters, but will be focused on technology advancement.